Rock?
The private equity group Cerberus
is reported to be interested in acquiring troubled UK mortgage
lender Northern
Rock.
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Cerberus owns a 51 per cent stake in GMAC,
the former financing arm of General Motors, which also has a
mortgage lending division, GMAC-RFC.
The involvement of GMAC in a bid by Cerberus for Northern
Rock could help to persuade HM
Treasury that the bid is credible and has a good chance of
success. It is believed that the Treasury would prefer bank
involvement in any bid for Northern Rock; GMAC’s backing could
prove a crucial factor in determining Cerberus’ success – or
otherwise.
Northern Rock initially ran into difficulties during the
summer’s ‘credit crunch’ when turbulence in world money
markets affected its business model, which involved sourcing more
than three-quarters of its funds from other financial
institutions.
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